Inner Metro growth prospects post Covid..

As an investor with Inner Metro Sydney holdings, I'm interested in the hypothesis that a post-covid world will see white collar professional tenants (and OOs) less driven towards the inner 5km ring suburbs.

Speaking personally, the culture at my employer wasn't especially supportive of remote working/WFH but has since seen how stuff still gets done AND collaboration happens whilst 100% of a large workforce are working remotely.

So will the CG shine come off the inner ring, or will these changes be short-lived rather than see a structural shift back towards outer suburban living a la the 1930s-50s era?

 

Tricky question. If one decides to sell their inner city pad and move out wards. What distance would be considered too far? if people stretch to 2hour drives/train rides then we are pushing towards regionals. If this holds true then it destroys the long term bullcase for property which is driven by scarcity of land close to major employment/social hubs.

And if you believe that the demand will not flow back towards the cbd then there is probably not much upside to buying and holding property investments in general for the long term..

But what I am seeing is still a strong demand in areas with good public school zones and lifestyle amenities (i.e. proximity to parks/beach/shops). If that inner city area offers those then id feel pretty safe.

 

I’d think areas a bit further from the city but offer good lifestyle choices such as a beach, like Cronulla in Sydney, seem much more attractive to me personally. In Melbourne I don’t see any major changes as the most attractive suburbs for a lifestyle as the inner city ones, unless you think somewhere like Daylesford might have a boom, but I think it’s early to say there’s be such a dramatic change.

 

I also live in the inner city. It's been great to have the amenity, but looking at things through the OO lens as a family man with growing kids you ask the question could I get land/pool/space but still be within a "reasonable" distance from the city for times when needed. I'd previously never considered areas like Upper North Shore in Sydney, or even as far out as Southern Highlands. But if you actually don't need to be in an office by 9am daily, it opens up possibilities.

..The worry then - with my investor hat on - is that other OOs will be thinking along the same lines, which could take a fair amount of heat out of the future inner ring market. This is why I drew the parallel with the 1930s when train lines and car ownership suddenly saw places 15km out of Sydney, Melbourne becoming more attractive and the relative decline of the Inner ring for several decades.

 

There will always be people who like the inner city ring but I think more people would consider an outside space above 10m2 to be a need.

I also think a study or extra bedroom will become more desirable.

 

Only negative I can think of is whether such a move would disadvantage the kids who may not be ready to nest and isolate like we are. Change of schools and proximity to job/social opportunities, would you need to drop them off everywhere they need to go, would they feel isolated etc. I know my eldest much prefers to be amongst the action and where innovation/change is most prevalent rather than living in boring suburbia as he puts it.

 

There will always be people who NEED to go somewhere for work.
It's simply not possible for my wife and I to work from anywhere other than the workplace(s). We need to physically be there.
For that reason, we will never sell our house on the metro line.

 

Sure, but the real question (and it's a good one) is if there will continue to be enough people who need to work on site to support the high prices of the inner city post COVID.


I'm in the inner city too...will be interesting to see how this plays out.

 

There are plenty of people around Rooty Hill who would jump at the chance to live closer in. Some are completely happy there, eg. Family is all there but others only live there because of the affordability. If they could afford a house not so far out like at Parramatta, they would. Similarly, there are many people who live in an apartment near the city and would love a terrace so they can have a garden.
I reckon these people and some young couples with up to 1-2 children would love the Inner west.
Loads of people live in the Central coast because they got pushed out of Sydney due to house prices. They might want to move. Though they may also realise they can WFH too!
I doubt inner suburban Sydney house prices will collapse. And not everybody can WFH.